Canty may gain Govt investment

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A large Canterbury irrigation scheme may be among the first considered by a new Crown company that will act as a bridging investor.

Minister of Primary Industries David Carter said yesterday that the Government was setting up a company that would invest in feasible, affordable and profitable irrigation schemes.

The Cabinet decided late last year that a company was needed to run the Government's $400 million irrigation fund. It would receive $80m in this year's Budget for its first year of operation, he said.

It was appropriate the Government took the investment role to ensure the right projects got under way, Carter said.

"The Crown-owned company will be a minority investor in any development project and it will also plan to be a relatively short-term investor," he said. "A number of groups are developing proposals for these larger, regional-level schemes, and the Government expects to consider at least one proposal in the next 12 months."

Irrigation New Zealand called the move "well deserved".

Chairman John Donkers said irrigation schemes were a huge financial pressure for farmers and farming communities.

"For many years farmers have personally carried the cost of water infrastructure, which can run into the millions of dollars yet benefits regional economies enormously," he said.

"Having a government-owned company invest in the initial stages takes the pressure off small communities to find that kind of capital upfront. The benefits for regional New Zealand can't be underestimated."

It was important to realise the Government was not giving away money. "This is equity funding. The Government is going to want it paid back over time," he said.

Irrigation projects in Canterbury, Otago, Tasman and Hawke's Bay were likely to be considered this year, Donkers said.